ISLAMABAD: Pakistan’s Cabinet Committee on Privatization on Friday approved the sale of between 51 percent and 100 percent stakes, along with management control, in three state-owned electricity distribution companies as part of efforts to overhaul the country’s troubled power sector.
The committee reviewed the proposed privatization of Islamabad Electric Supply Company (IESCO), Gujranwala Electric Power Company (GEPCO) and Faisalabad Electric Supply Company (FESCO), according to a statement issued by the office of Deputy Prime Minister Ishaq Dar, who chaired the meeting.
Pakistan has been pursuing reforms in the power sector under an International Monetary Fund-backed economic stabilization program aimed at reducing losses, improving recoveries and tackling chronic circular debt that has strained public finances for years.
The move follows the country’s landmark privatization of the national carrier, Pakistan International Airlines, in December, with officials describing it as a breakthrough in the government’s long-stalled privatization drive.
“Deputy Prime Minister/Foreign Minister Senator Mohammad Ishaq Dar chaired a meeting of the Cabinet Committee on Privatization to review key power sector matters,” the statement said.
“The committee approved the Transaction Structure and decided to offer outright sale of 51 percent to 100 percent share capital in each DISCO along with management control, subject to Cabinet approval,” it continued while naming the three entities.
The meeting was attended by Power Minister Awais Leghari, Adviser on Privatization Muhammad Ali, Special Assistant to the Prime Minister Tariq Bajwa and senior officials from the privatization and power divisions.
“DPM/FM noted that the initiative is intended to strengthen service delivery, ensure reliable electricity supply, and bring private sector efficiency into the sector,” the statement said.
Pakistan’s distribution companies have long grappled with issues such as high transmission losses, weak bill recoveries and inefficiencies that contribute to the country’s mounting circular debt crisis.
Under the IMF program, the government plans to privatize other loss-making state-owned enterprises as part of the broader structural economic reforms.
